What do economists mean when they say that "there is no such thing as a free lunch?"
What will be an ideal response?
Everything has a cost, even when you do not pay money for it. Suppose that somebody bought you lunch. Resources from the economy were used to make that lunch, even though those resources may not belong to you. Consequently, the economy gave up anything else it could have made with the resources it used to make the lunch. The opportunity cost of that lunch is the lost opportunity to use those resources in some other way.
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The Bureau of Economic Analysis divides it's statistics on GDP into four major categories. List the categories of expenditures and define each
What will be an ideal response?
According to adaptive expectations theory, which of the following would be the result of expansionary monetary and fiscal policies?
a. There is a short-run reduction in unemployment. b. There is a long-run trade off between inflation and unemployment. c. The inflation rate falls in the long run. d. The economy always operates at the natural rate of unemployment
Advertising is used by firms to increase their price elasticities of demand
Indicate whether the statement is true or false
Explain the three reasons given for the downward slope of the aggregate demand curve.
What will be an ideal response?